Purposes of Performance Appraisal

To improve, employees need to know how they are doing.The supervisor and employee can plan how to

improve weak areas.An appraisal can help motivate employees.Performance appraisals are part of the ongoing

control process.Performance appraisals provide important records

for the organization.

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The Appraisal Process – Step 1

Establish and communicate expectations for performance.List three to five major responsibilities of each

position.Focus the appraisal on these responsibilities.Be sure employees know and understand what is

expected of them.Employee are most likely to understand and be

committed to objectives they helped develop.

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The Appraisal Process – Step 2

Establish and communicate standards for measuring performance.Each expectation should be measurable.A supervisor’s task includes deciding how to

measure employees’ performance and then making sure employees know what will be measured.

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The Appraisal Process – Step 3

Observe and measure individual performance against standards.A supervisor should continuously gather

information about each employee’s performance.When preparing a performance appraisal, a

supervisor compares this information with the standards for the employee being appraised.

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The Appraisal Process – Step 4

Reinforce performance or provide remedies.Point out to employees where they have

performed well.Asking an employee to help solve a problem is

often more effective than the supervisor simply stating a remedy.

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Possible Causes for Poor Performance

Inadequate skillsLack of effortShortcomings of the processExternal conditionsPersonal problems

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What to Measure in an Appraisal

Do not label people with certain characteristics.

Focus on behavior and results.When appraisals require supervisors to draw

conclusions about the employee’s personal characteristics, try to base them on observations about behavior and results.Record at least one specific example for each

category rated.

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Qualities of Effective Performance Appraisal Measures

ObjectiveJob-relatedBased on behaviorsWithin employee’s controlRelated to specific tasksCommunicated to employees

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EEOC Guidelines

The behaviors and characteristics measured by a performance appraisal should be related to the job and to succeeding on the job.

Appraisals should be based on the employee’s success in carrying out the essential tasks of a particular job.

The ratings in a performance appraisal should not be discriminatory.

An employee should know performance standards in advance.

Employees should be able to ask questions about their ratings.

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Performance Appraisals and Pay Reviews

Many organizations review an employee’s wage or salary level at the time of the performance appraisal.Employees may focus on the issue of money,

diminishing a supervisor’s motivating and coaching opportunities.

A supervisor who must review pay rates at performance appraisal time should make an extra effort to emphasize performance.

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Types of Appraisals

Graphic rating scales:Most commonly used; relatively easy to useRates the degree to which an employee has achieved

various characteristicsPaired-comparison approach:

Measures the relative performance of employees in a group

Appropriate to find one outstanding employee in a group

Drawbacks: possible harm to morale and teamwork, and possible lawsuits

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Types of Appraisals (continued)

Forced-choice approach:Appraisal form provides sets of statements describing

employee behaviorEssay appraisal:

Often used with other types of appraisals, such as graphic rating scales

Drawback: depends on supervisor’s writing skillsBehaviorally Anchored Rating Scales (BARS):

Rate employee performance in several areas such as work quantity and quality

Drawbacks: can be tailored and less subjectiveMcGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.17-12

Types of Appraisals (continued)

Checklist appraisal:Contains a series of questions about an

employee’s performanceDrawbacks: can be difficult to prepare and a

supervisor has no way to adjust the answers for any special circumstances that affect performance

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Sample Checklist Appraisal

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Types of Appraisals (continued)

Critical-incident appraisal:Written record of incidents that show positive and

negative ways an employee has actedWork-standards approach:

A supervisor compares employee’s actual performance with established standards

Management by Objectives (MBO):A supervisor compares each employee’s

accomplishments with the objectives for that employee

Assessments by someone other than supervisor:360-degree feedback

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Sources of Bias

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The Performance Appraisal Interview

Purpose of the interviewPreparing for the interviewConducting the interview

Problem solving and coachingSignaturesFollow-up

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The Process of Conducting a Performance Appraisal Interview

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